Her lawsuit alleges that Medtronic paid doctors at least $50 million in kickbacks over a 4-year period. Internal company documents filed with the lawsuit, provide indepth details of the company's campaign to influence doctors. Wisconsin physician, Dr Thomas Zdeblick, listed as a defendant in the action, in 1998 signed a 10-year $400,000 consultant contract with Medtronic that only required him to "consult" for eight days each year.
The complaint alleges that Medtronic hosted medical conferences where the "principal objective" was to "induce the physician, through any financial means necessary" to use its devices. According to Ms Poteet, Medtronic targeted surgeons while they were still in training, and paid for doctors to attend any of 200 professional meetings a year.
When doctors would visit Memphis, she says, they were sometimes taken to the "Platinum Plus" strip club, and the expenses for the outing were recorded as an evening at the ballet.
According to an industry newsletter, Orthopedic Network, the cost of the spinal implant device is around $13,000. Because the devices are so profitable, the money spent by Medtronic on doctors "is peanuts," a former employee who still works in the industry, said in the January 24, 2006, Ledger. Sales representatives earn generous commissions, he said, so they will work hard to satisfy the doctors' demands.
"You're going to make sure you do whatever he wants, whatever it is," he told the Ledger.
Critics say the device makers have become a primary source of income for surgeons, and many come to rely on it. "The amount of money is astronomical," says Dr James Herndon, a former president of the American Academy of Orthopedic Surgeons, in the Ledger.
The device makers "know the volumes these surgeons have," he noted. "They seek them out, and they seek relationships with them."
Critics within the industry say doctors gravitate to the company with the highest paying consulting contracts in exchange for using the company's product. According to court filings, many doctors were paid consulting fees far higher than the $3,000 a day that a surgeon might expect to earn.
A former employee of several device makers, including Medtronic, who declined to be identified because he still works in the industry, says "it is very difficult to compete legitimately, to get a doctor to look at ones product when there are so many bought physicians in the industry."
While working for one company, he says, it was decided prior to the American Academy of Orthopedic Surgeons meeting in Chicago, that the goal would be to write 25 consulting contracts with doctors. He said, several doctors asked what project they would be working on, and the answer was always "we'll find something."
In his position, he was responsible for documenting the doctor's work product each month, and says that it was a real struggle to come up with 8 hours of valid work product for these physicians. But even though some never had work product, he noted, "their consulting check was always mailed."
Each month the industry employee said, he received spreadsheets that showed how much business each doctor did with the company, and then it was discussed whether the doctor's consulting contract would continue based on the amount of business that was generated.
Internal company documents filed with Ms Poteet's lawsuit prove that Medtronic tracked the use of its devices by each doctor who attended the conferences the company paid for.
A June 2003 spreadsheet for a conference in California, lists over 200 doctors and includes an estimate of the dollar amount of the devices each doctor uses in surgery. One surgeon is described as "a 100 percent compliant M.S.D. customer" (Medtronic Sofamor Danek), and other doctors were described as needing "special attention."
For Dr K Daniel Riew, also named as a defendant in the lawsuit, it was noted on the spreadsheet that he was using a substantial amount of competing devices. "He will be designing a new plate with M.S.D.," the document says, "so all of his business will gravitate our way in the near future."
The industry employee also echoed allegations of perks similar to those made in the Poteet lawsuit. "The owners of the company were very well known for frequenting strip clubs," he said, "and prostitutes were known for being at the national sales meeting to be in the owners rooms for the late night meetings."
The complaint alleges that Medtronic hosted medical conferences where the "principal objective" was to "induce the physician, through any financial means necessary" to use its devices. According to Ms Poteet, Medtronic targeted surgeons while they were still in training, and paid for doctors to attend any of 200 professional meetings a year.
When doctors would visit Memphis, she says, they were sometimes taken to the "Platinum Plus" strip club, and the expenses for the outing were recorded as an evening at the ballet.
According to an industry newsletter, Orthopedic Network, the cost of the spinal implant device is around $13,000. Because the devices are so profitable, the money spent by Medtronic on doctors "is peanuts," a former employee who still works in the industry, said in the January 24, 2006, Ledger. Sales representatives earn generous commissions, he said, so they will work hard to satisfy the doctors' demands.
Critics say the device makers have become a primary source of income for surgeons, and many come to rely on it. "The amount of money is astronomical," says Dr James Herndon, a former president of the American Academy of Orthopedic Surgeons, in the Ledger.
The device makers "know the volumes these surgeons have," he noted. "They seek them out, and they seek relationships with them."
Critics within the industry say doctors gravitate to the company with the highest paying consulting contracts in exchange for using the company's product. According to court filings, many doctors were paid consulting fees far higher than the $3,000 a day that a surgeon might expect to earn.
A former employee of several device makers, including Medtronic, who declined to be identified because he still works in the industry, says "it is very difficult to compete legitimately, to get a doctor to look at ones product when there are so many bought physicians in the industry."
While working for one company, he says, it was decided prior to the American Academy of Orthopedic Surgeons meeting in Chicago, that the goal would be to write 25 consulting contracts with doctors. He said, several doctors asked what project they would be working on, and the answer was always "we'll find something."
In his position, he was responsible for documenting the doctor's work product each month, and says that it was a real struggle to come up with 8 hours of valid work product for these physicians. But even though some never had work product, he noted, "their consulting check was always mailed."
Each month the industry employee said, he received spreadsheets that showed how much business each doctor did with the company, and then it was discussed whether the doctor's consulting contract would continue based on the amount of business that was generated.
Internal company documents filed with Ms Poteet's lawsuit prove that Medtronic tracked the use of its devices by each doctor who attended the conferences the company paid for.
A June 2003 spreadsheet for a conference in California, lists over 200 doctors and includes an estimate of the dollar amount of the devices each doctor uses in surgery. One surgeon is described as "a 100 percent compliant M.S.D. customer" (Medtronic Sofamor Danek), and other doctors were described as needing "special attention."
For Dr K Daniel Riew, also named as a defendant in the lawsuit, it was noted on the spreadsheet that he was using a substantial amount of competing devices. "He will be designing a new plate with M.S.D.," the document says, "so all of his business will gravitate our way in the near future."
The industry employee also echoed allegations of perks similar to those made in the Poteet lawsuit. "The owners of the company were very well known for frequenting strip clubs," he said, "and prostitutes were known for being at the national sales meeting to be in the owners rooms for the late night meetings."
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